In a move designed to boost its presence in Australia, Damco, a global third-party logistics (3PL) and freight forwarding subsidiary of A.P. Moller-Maersk Group, said it has signed an agreement to acquire PacNet, a global freight forwarder.

Financial terms were not disclosed.

Based in Australia, PacNet has 382 employees and has annual sales of $180 million (U.S.). It also has a strong presence in China.

Damco said that the addition of PacNet improves its platform in both the North Asia and Asia Pacific regions, and it expects to gain market leadership positions in the retail and lifestyle sectors in Australia, as well as strengthen its airfreight position from China to Australia, coupled with the fact that shipper customers of each company will benefit from what it called highly competitive services, increased frequency, and improved access to peak capacity in a growing China-Australia trade lane.

“The strategic logic for this acquisition is about business development and growth from bringing together complimentary customers, skills and experience, said Claus Fonnesbech, Global Media Relations Manager for Damco, in an interview. “PacNet has developed an enviable reputation for service in the segments it dominates, but has been looking for ways to accelerate the expansion of the services it can offer to its customers from a focus in Hong Kong and Mainland China.”

Fonnesbech added that the acquisition will serve to strengthen Damco forwarding capabilities in Hong Kong, South China and Australia, explaining that the benefits are improved cost competitiveness, more comprehensive solutions, new products and a growing global network as PacNet’s Australian customers seek to broaden their sourcing base from China to the rest of Asia.

“This will make Damco the market leader in providing end to end international supply chain solutions in the Retail and Lifestyle and apparel verticals and on air freight from Hong Kong / Mainland China to Australia,” he said. “The acquisition of PacNet will also enable Damco to leverage the NTS air freight operating platform. PacNet is also stronger in Hong Kong, where it will be a valuable addition.”

Going forward, Fonnesbech said Damco intends to bring PacNet and Damco branches together as soon as practical. In many locations, he said this will be quite quick as Damco has the space available, but in a few locations it will take a bit longer as it first needs to find new premises.

It is anticipated there will be a small number of redundancies as branches are brought together in this way, he said, but Damco aims to be able to provide clarity to all affected PacNet and Damco employees by November 1 about their roles and where it is proposed they will work.

“We will be working hard on the further integration process,” he said. “However, it is too early to comment on the results of this as of yet, but rest assured that we are doing our utmost to complete this soonest and provide full clarity and support for all involved.”

October 11, 2012

About the Author

Jeff Berman, Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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